Know Your Rights (and Royalties)

Depending on what kinds of contracts you enter into as an author, you’ll see different terms about what rights are being assigned or licensed to the publisher and for how long. If it’s a journalistic article for a magazine, for example, you might grant a “first publication right”, while retaining the copyright yourself. In this case you’re basically giving the magazine permission to publish the piece first and you may publish elsewhere later. (Of course other contract terms may require you to credit the first publisher or obtain their permission, or may time limit you in terms of when the next publication could be.)

If you are signing book deals, you’ll see lots of different kinds of rights in your contracts: things like reproduction and distribution rights, derivative works rights, first and second serial rights, foreign rights, translation rights, audiobook rights, merchandising rights, film and television rights, etc. The list goes on and on. For the unwary author, it’s a good idea to seek legal advice, or at least get your agent’s advice (if you have one) on the pros and cons of assigning or licensing the various different rights a publisher may ask for. Each deal is different and what may be important to you may not be as important to your publisher or vice versa; or you may be at cross-purposes about which rights you want to assign to the publisher in the first place.

You should also ascertain, again with legal or other advice if you need it, whether you are assigning your rights (basically selling them to the publisher) or licensing them (granting the rights to the publisher for a particular time period). If you’re licensing, you also need to know if you’re granting an exclusive license to the publisher, which is almost the same as assigning the work outright. If the publisher has an exclusive license, they will be the only one who can commercially exploit the rights during the term of the license.

It’s also important to understand that your royalty payments (the share of the income the publisher gives you with respect to sales of your book) may be different for the different rights, which is why royalties clauses can be as difficult to understand as the clauses about assigning rights. Your royalty payments can also be different for different formats in which the publisher sells your book: for example, you may get a higher percentage royalty for e-books than for hardcover or paperback books.

Obviously, there’s no room in a column like this to go into details of all the different kinds of rights, and royalty, arrangements you may face in your first, second, or twentieth publishing contract. That’s why it’s important to use whatever resources you have to understand what the publisher is offering you. It’s easy to make a mistake at the beginning, and if you misunderstand your contract, it can be difficult (often not possible) to fix it later on.

There are resources available to help authors understand their contracts. A great recent resource is the Authors Alliance Guide to Understanding and Negotiating Book Publication Contracts. If you’re a member of an author’s organization, like the Authors Guild, there are often resources available to help authors with legal issues as well. Many cities have Volunteer Lawyers for the Arts Organizations that you can contact for help or advice as well. It’s worth putting in the effort to find help or advice. While most publishing contracts run relatively smoothly, problems can arise down the track, and it is notoriously difficult for an author to make a living from writing. So an ounce of prevention is worth a pound of cure in many cases. If you can maximize your understanding of the contract terms, and perhaps negotiate better royalty terms on certain kinds of sales, it make help you out in the longer term.

And my usual disclaimer applies to this column: Nothing written here is intended as formal legal advice, but is for informational purposes only.